More Good News on Credit: TED Spread Narrows Further, Lending Confidence at 9-month High

The TED Spread (Difference between 3-month treasury yield and LIBOR), a crucial measure of interbank lending confidence, narrowed to its lowest level in nine months today, indicating that the credit crunch is continuing to ease. Bloomberg:

The so-called TED spread, which measures the difference between what the U.S. government and banks pay to borrow in dollars for three months, dropped below 78 basis points for the first time since August. It held at that level as of 11:56 a.m. in London, after touching 77.7 basis points. The cost of borrowing dollars overnight dropped to the lowest level since December 2004, the British Bankers' Association said today...

"The worst of the fears about the liquidity crisis appear to be alleviating,'' said Peter Jolly, head of markets research in Sydney at NabCapital, the investment-banking arm of National Australia Bank Ltd. "Liquidity is becoming more available ever since the bold moves by the Fed.''